The report, based on data available in April 2023, describes an economy supported in 2022 by high commodity prices. Growth is estimated at 3.1 percent, driven by oil, manganese and timber. The fiscal balance moved from a deficit of 1.9 percent of GDP in 2021 to an estimated surplus of 3.0 percent in 2022, and public debt fell from 60.7 to 52.0 percent of GDP. The trade balance is estimated at 43.7 percent of GDP, and inflation reached 4.3 percent in 2022.
The report notes, however, that spending on fuel subsidies grew by 138 percent in 2022, and that tax expenditures reached CFAF 351.5 billion, or 2.6 percent of GDP. It also points to the continued accumulation of external arrears in 2022 and early 2023.
Special topic: fuel subsidies
The cost of fuel subsidies is estimated at 0.7 percent of GDP in 2022, the equivalent of two francs out of every three the State spends on health, and of more than half its education budget. Industrial users lost their fuel subsidy in June 2022. Drawing on international experience, the report sets out four good practices: first adjust prices for the fuels that benefit the richest households most, adopt a price smoothing mechanism, stagger the reform, and run consultations and public communication, while accompanying the reform with targeted measures to protect the most vulnerable.
